GCC funds eyeing New York assets - lawyer

GCC sovereign wealth funds are seeking to invest heavily in the New York property market, a leading Manhattan-based real estate lawyer has told Arabian Business.

“There’s definitely been a renewed interest from Middle Eastern governmental funds coming back into the market, reworking their positions, and pre-negotiating with lenders on major positions that they’re holding,” Rheem Bell & Mermelstein co-founder Edward Mermelstein said in an interview.

“They are seeing that there is quite a lot of opportunity right now in the market because we have been impacted in the same way as the rest of world has. The positions here are probably as good if not better than they have been in the last 20 years in terms of opportunity,” he added.

His comments come as Qatari sovereign wealth funds continue to be linked with real estate assets in London.

Although Mermelstein was unable to detail exactly which funds had been on the look-out for real estate assets, he did say that the most activity had hailed from the UAE and Qatar.

“Those two have been the most active in the last few years, especially prior to the crash of 2008, and it’s expected that they will come back into the market in the future because of their strong positions in the market and long-term investments that they think will pay off,” he said.

“So far, we’ve not seen any major closures or contracts signed in the last few months, but that’s something that is definitely expected, because these are the institutional players that are competing with the rest of the world for the major properties in Manhattan.”

In recent weeks, Qatari investors have snapped up the Harrods department store in London for $1.5bn and the Qatar Investment Authority (QIA) – the Gulf state’s biggest sovereign wealth fund – has expressed an interest in taking over Songbird Estates, owner and manager of the Canary Wharf development.

Earlier this month, real estate consultancy Jones Lang LaSalle predicted that Qatar would be the largest source of global real estate capital during 2010.

“Cash rich and with a strong appetite for splashy overseas assets, Qatari vehicles have lately outshone their counterparts from the region and are projected to carry on with their rapid expansion across the real estate world,” the report added.